DoubleLine Capital CEO Jeffrey Gundlach said the bond market is screaming that a recession is imminent, and he sees the Federal Reserve starting to lower interest rates in the near future. Gundlach points to the Treasury yield curve, which is rapidly becoming less inverted, and indicative of an economic downturn on the horizon. "UST 2 Year versus 10 Year is now inverted 40 basis points. Was 107 basis points just a few weeks ago. All UST Yields two years and out are well below the Fed Funds rate. Red alert recession signals," Gundlach said in a tweet Friday morning. Earlier this month, the gap between the 2-year Treasury yield and the 10-year Treasury rate widened to more than 100 basis points, marking the most severe inversion since September 1981. Short-term lending rates above long-term rates have accurately foretold looming recessions for the past 50 years. The Fed on Wednesday took the benchmark fed funds rate a quarter percentage point higher to a range between 4.75%-5% , while signaling one more rate hike coming this year. Gundlach believes the central bank will soon reverse course. "I predict the Federal Reserve will be cutting rates substantially soon," he tweeted. But Gundlach's prediction contradicts what Fed Chairman Jerome Powell explicitly said Wednesday. "Participants don't see rate cuts this year. They just don't," Powell said during a news conference after the Federal Open Market Committee wrapped up its latest policy meeting. Tighter lending conditions resulting from the ongoing banking crisis could easily have a significant macroeconomic impact, which would be factored into the Fed's policy decisions, Powell acknowledged. "The question for us though is how significant will that be, and what would be the extent of it and what would be the duration of it," he said, while adding that "rate cuts are not in our base case."